Ratios
Calculate the Savings Ratio for Leah
0.25
What is a balance sheet
A summary of your assets (what you own), your liabilities (what you owe), and your net worth (assets minus liabilities).
Leah just received her $250 paycheck. Where does this go on her balance sheet?
Liquid Assets.
How do you calculate your Net Worth
Assets - Liabilities
Calculate the Liquidity Ratio For Sasha
2.12
Why would a mortgage not be a current Liability
It takes over a year to pay off
Sophie has recently decided to start her own bakery and todo, so she opened her own storefront but had to take out a mortgage that she will only be able to pay off in 6 years. What categories on the balance sheet will be affected
Long-Term Assets and Long-Term Liabilites
If Sophie wants to buy a car and is planning on taking out a mortgage, which she will only be able to pay off in 4 years, what type of goal is it if she wants to pay it back in 4 years?
Medium-Term Goal.
Is it better to have a high or low Current Ratio
High, as it means you have a high degree of liquidity and can pay off short-term debts
If Sasha decided to take out a loan to pay for her online classes this year, where would the liability fall? She will pay it back in a year.
Current liabilities
Margret recently invested in $20,000 worth of baking equipment, where would this fall
Long-Term Asset
What does liquidity mean?
Your access to ready cash, including savings and credit, to cover short-term or unexpected expenses.
Calculate the Debt-to-Asset Ratio for Sasha
0.81
If Sasha spent half the money in her savings account, how much would her Net worth be affected
It would go down to $130050
Where will a line of Credit that will take 2 years to pay off fall under
Long - Term Liability
Name 3 different investment assets
Stocks, Bonds, RRSP, TFSA, Mutual Funds
What does a Savings Ratio of 1 tell you about someones finance situation
You are going to go into debt and are barely saving enough money to cover your expenses
What would Sashas Net Worth be if she payed off all her student debt
$184500
Jia withdraws cash to buy a new car. However, she also takes out a car loan to help cover the cost. What three accounts are affected?
1. Cash - liquid asset
2. Vehicle - long-term asset
3. Car loan - long-term liability
1. ESTABLISH YOUR FINANCIAL GOALS
2. CONSIDER YOUR CURRENT FINANCIAL POSITION
3. IDENTIFY AND EVALUATE ALTERNATIVE PLANS
THAT CAN HELP YOU ACHIEVE YOUR GOALS.
4. SELECT AND IMPLEMENT A PLAN
5. EVALUATE YOUR PLAN
6. REVISE, MAKE CHANGES, AND REVISIT